DOJ Policy Revision: Agency Guidance Alone No Longer Supports FCA Liability
Revised Justice Manual bars False Claims Act cases resting solely on breaches of advisory agency guidance, but contractor certifications and FAR clauses can still make the same documents binding and material.
DOJ has revised its False Claims Act enforcement policy, as reflected in the Justice Manual, to state that the department generally may not base an FCA action solely on a contractor's failure to follow "agency guidance" — handbooks, manuals, FAQs, policy memoranda and technical publications explaining or implementing agency programs. An FCA case must instead rest on a violation of a binding requirement: a statute, regulation, or enforceable contract term.
The effect is that the source of each compliance obligation becomes the central diligence question. Because contracts routinely incorporate outside documents, guidance that is advisory for the public can be mandatory for a given contractor. Where a clause flows a standard into the contract — the source's example is NIST SP 800-171 incorporated through DFARS 252.204-7012 — knowingly falling short while seeking payment can still support liability. The source also notes the FAR clause implementing Executive Order 14398 makes compliance material to payment decisions, narrowing a later materiality defense.
Two cautions. Post-award guidance generally does not alter the contract; only a contracting officer acting within authority can modify it, absent express incorporation language. And "nonbinding" is not "irrelevant": DOJ may still use guidance as evidence of knowledge, industry practice, and materiality where a contractor certified compliance. Watch how the policy is applied in pending FCA matters.